Her rate for wind coverage on her family house in Holmes Beach more than doubled. Then she got a small refund. Her latest premium has dropped, but is still higher than it was back in 2006.

What’s going on here?

Like hundreds of other homeowners on Anna Maria Island and throughout Florida, Fortenberry and husband Brett say they aren’t sure what happened or why.

“We live in a tiny little one-story house - about 900 square feet - on a tiny little property and we have a policy with Citizens,” she said. “We were paying about $900 a year for wind coverage. Then it went to $2,225. Then we got a $250 refund. Now the rate is $1,021.”

Go figure.

According to their insurance agent, Mark Mixon of Jim Mixon Insurance Inc. in Holmes Beach, the Fortenberrys are among the thousands of Florida homeowners who were “taken out” of Citizens Property Insurance Corporation and placed with another insurance company.

Citizens is considered the state’s insurer of last resort. But in an effort to reduce Citizens’ exposure to risk, Citizens will permit a private insurer to take over some of its policies. And the private insurer can charge the policyholder a higher rate than Citizens.

About 320,000 policyholders were taken out of Citizens by Poe Financial Group several years ago. When Poe was unable to pay Florida claims that arose from the 2004-05 hurricane season, the company was liquidated. Many of its policyholders were then returned to Citizens.

In 2006, an estimated 41,000 Florida homeowners were switched from Citizens to either Florida Peninsula or Homewise Insurance.

The Fortenberrys were assigned to Florida Peninsula and very quickly their annual premium for wind insurance shot up to $2,225.

“That was tough,” Pam Fortenberry said. “I had just been paid a commission for some art work and it all went to pay the insurance bill.”

Husband Brett is a self-employed detailer for boats and a gardener who has created a lush, tropical garden that conceals the small house where they have lived for nearly 13 years. Their concrete-block home is insured for $142,000.

According to Mixon, the Fortenberrys’ premium doubled when Florida Peninsula raised rates by 91 percent “without it being approved by the state.”

Mixon said the state insurance commissioner ordered Peninsula to reduce the amount of its rate increase and make refunds.

That’s when the Fortenberrys wound up with a $250 refund.

By the time their policy came up for renewal in November 2007, the couple was back with Citizens. Their annual premium for wind insurance fell to $1,021 - less than half the $2,225 they paid the previous year.

Explains Mixon: “It’s a ping-pong game.”

Rate relief promises

Rep. Bill Galvano (R-68) said the state is in an “administrative battle right now” with the insurance industry over the question of what happened to the promises of rate reductions of 20 percent or more.

The Florida Legislature last year passed an insurance reform law that provided insurance companies an option to purchase cheaper reinsurance from the state. Insurers were supposed to pass through their savings to policyholders.

But the savings haven’t come through as expected.

In fact, some companies, including Allstate, have filed for rate increases. The state Office of Insurance Regulation has cracked down on the industry in recent weeks and a Senate committee in Tallahassee held hearings earlier this month to question insurance company executives about the rate relief mystery.

And according to a recent report in the Miami Herald, Gov. Charlie Crist has hired attorneys “to see if the state can file a class-action suit against the insurance industry on behalf of state residents.”

Galvano, who represents western Manatee County, including Anna Maria Island, says that legislators “want to know why we were told one thing by the industry on how to achieve a goal and then that goal was not achieved, and the industry has not given us an answer on that.”

The Legislature will probably take some action on insurance during the upcoming regular session beginning in March, Galvano said.

“I wouldn’t be surprised to see some proposals to give more teeth to the Office of Insurance Regulation to enforce its regulation,” he said.

Despite the current standoff between the state and the industry, Galvano says he believes that the “pressure is starting to recede a bit in the insurance market,” based on reports he has received from constituents and others.

“This is not a state where it is easy to afford insurance yet, but it is better,” he said.

He said the absence of storm activity, combined with the “firm action” by the Office of Insurance Regulation in holding down rates has helped to calm the market. Steps by the state in expanding the state’s risk with reinsurance also has had a positive impact, he said.

“But we can’t rest on that. We have to continue to make sure we are as fiscally responsible as we can be without overburdening tax-paying citizens.”

What is going to happen, The Islander asked Galvano, in January 2009 when the premium freeze ends on Citizens policies?

“That is a great question, and that is something to be concerned about,” Galvano said. But for now, he says, “we are moving toward a more market-based system.”

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